Honda has already taken a tight grip of its purse strings in recent months, in the process killing off the keenly-awaited NSX successor as well as its Formula 1 program.

With the big budget items gone, Honda has now turned its cost-cutting attention to the places it will hurt most.

In North America Honda will reduce annual production by around 62,000 units. As a result it has been forced to cut production days, offer voluntary payouts and reduce executive salaries.

In Europe the brand has tried a softer tack, using the introduction of more green-tech to soften the blow of its withdrawl from the Frankfurt Motor Show.

As a diversionary tactic, Honda has used the April 18 introduction of the Insight hybrid in Germany and the announcement of a permanent Fuel Cell Research Centre there to deflect attention away from its decision to skip Frankfurt.

Honda will continue to assess the motor show circuit and will eventually return. However, at the moment the funds are being diverted to more crucial areas of its operations.

Voluntary redundancy packages are also being offered to most of Honda’s 35,600 US employees. Retirement packages are also being improved in an effort to encourage more workers to retire from the company.